Deduction available under Section 80CCD(1B)? | Value Research A new sub-section 1B was added to Section 80CCD in the last budget and it allows an additional tax deduction of up to Rs 50,000 on contributions to NPS
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Deduction available under Section 80CCD(1B)?

A new sub-section 1B was added to Section 80CCD in the last budget and it allows an additional tax deduction of up to Rs 50,000 on contributions to NPS

What is the deduction available to a government servant under Section 80CCD(1B) if his contribution to NPS is ₹2 lakh and if his contribution to NPS is ₹1 lakh?
- Radhakrishnan

Section 80CCD provides tax deduction on contributions to National Pension Scheme (NPS). A new sub-section 1B was added to Section 80CCD in the last budget and it allows an additional tax deduction of up to ₹50,000 on contributions to NPS. However, the total tax deduction one can claim under Section 80C and Section 80CCD is ₹2 lakh.

To answer your theoretical query, the person who has already exhausted the maximum limit of ₹2 lakh won't be able to claim the additional tax deduction under the new sub-section, while the person who has invested only ₹1 lakh can claim the additional tax benefit of ₹50,000 under 80CCD(1B).


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